Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below: Product Percentage of total sales White 48% Fragrant 20% Loonzain 32% Total 100% Sales Variable expenses $ 369,600 110,880 100% 30% $ 154,000 123,200 100% 80% Contribution margin Fixed expenses Net operating income $ 258,720 70% $ 30,800 20% $ 246,400 135,520 $ 110,880 100% 55% 45% $ 770,000 369,600 100% 48% 400,400 52% 226,720 $ 173,680 Dollar sales to break-even - Fixed expenses / CM ratio = $226,720/0.52 = $436,000 As shown by these data, net operating income is budgeted at $173,680 for the month and the estimated break-even sales is $436,000. Assume that actual sales for the month total $770,000 as planned; however, actual sales by product are: White, $246,400; Fragrant, $308,000; and Loonzain, $215,600. Required: 1. Prepare a contribution format income statement for the month based on the actual sales data. 2. Compute the break-even point in dollar sales for the month based on your actual data.

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant,
and Loonzain. Budgeted sales by product and in total for the coming month are shown below:
Product
Percentage of total sales
White
48%
Fragrant
20%
Loonzain
32%
Total
100%
Sales
Variable expenses
$ 369,600
110,880
100%
30%
$ 154,000
123,200
100%
80%
Contribution margin
Fixed expenses
Net operating income
$ 258,720
70%
$ 30,800
20%
$ 246,400
135,520
$ 110,880
100%
55%
45%
$ 770,000
369,600
100%
48%
400,400
52%
226,720
$ 173,680
Dollar sales to break-even - Fixed expenses / CM ratio = $226,720/0.52 = $436,000
As shown by these data, net operating income is budgeted at $173,680 for the month and the estimated break-even sales is
$436,000.
Assume that actual sales for the month total $770,000 as planned; however, actual sales by product are: White, $246,400;
Fragrant, $308,000; and Loonzain, $215,600.
Required:
1. Prepare a contribution format income statement for the month based on the actual sales data.
2. Compute the break-even point in dollar sales for the month based on your actual data.
Transcribed Image Text:Gold Star Rice, Limited, of Thailand exports Thai rice throughout Asia. The company grows three varieties of rice-White, Fragrant, and Loonzain. Budgeted sales by product and in total for the coming month are shown below: Product Percentage of total sales White 48% Fragrant 20% Loonzain 32% Total 100% Sales Variable expenses $ 369,600 110,880 100% 30% $ 154,000 123,200 100% 80% Contribution margin Fixed expenses Net operating income $ 258,720 70% $ 30,800 20% $ 246,400 135,520 $ 110,880 100% 55% 45% $ 770,000 369,600 100% 48% 400,400 52% 226,720 $ 173,680 Dollar sales to break-even - Fixed expenses / CM ratio = $226,720/0.52 = $436,000 As shown by these data, net operating income is budgeted at $173,680 for the month and the estimated break-even sales is $436,000. Assume that actual sales for the month total $770,000 as planned; however, actual sales by product are: White, $246,400; Fragrant, $308,000; and Loonzain, $215,600. Required: 1. Prepare a contribution format income statement for the month based on the actual sales data. 2. Compute the break-even point in dollar sales for the month based on your actual data.
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